Coal exploration and mining company Canyon Coal’s greenfield Gugulethu project – located south-east of Hendrina, in Mpumalanga – forms part of the miner’s expansion objectives to become a larger player in the sector.

Initially delayed by Covid-19’s impact on coal prices, Canyon Coal reassessed the viability of the mine and found that the project remained feasible as a result of the current coal price, explains Canyon Coal projects head Gerhard Cronje.

The Gugulethu project has an estimated life-of-mine (LoM) of about 50 years, based on a run-of-mine production of about 200 000 t a month from opencast areas and 200 000 t a month from underground sections.

Mining will take place using underground and opencast methods. The Gugulethu colliery, set to produce a single RB3 product, is geared towards supplying thermal coal to the export market.

The mining right, water-use licence and environmental authorisation have been granted. Canyon Coal also owns the farm portion on which the supporting infrastructure – such as beneficiation plant, pollution control dams and offices, among others – will be developed.

Phase 1 of the project will consist of opencast mining from a reserve of 14.3-million tonnes, with Phase 2 extending underground. Phase 1 of the project will comprise three pits, one of which has been designed specifically to gain access to the underground reserve.

Phase 1 of the new colliery’s opencast development is budgeted at about R600-million. Phase 2 comprises the underground mining section and is budgeted at about R890-million.

Construction of the colliery is planned to start in January 2023, with construction of the new mine anticipated to take eight to ten months. The opencast component of the project is regarded as the key to unlocking the full potential of the mine and will fund the capital for the larger underground section.

The underground portion will extend the LoM by another 40 years and is expected to start development towards the end of the opencast section’s life, which will likely occur in about the fourth quarter of 2028, says Cronje.

However, Canyon Coal has allowed for flexibility to mine the underground reserve at any time during the opencast operations, should the company choose to ramp up production.

“Although this is Canyon Coal’s first underground mine, the management team has extensive experience in underground mining,” he adds.

The mine will require supporting infrastructure, including a dedicated 400 t/h beneficiation plant to wash and separate the mined thermal coal on site and prepare it for sale.

Beneficiating the coal provides substantial economic benefits, as the coal can be upgraded to a saleable product that repositions the mine to a preferable position along the cost curve.

“The coal washing process removes impurities and offers substantial benefits by means of controlling the ash content and calorific value, in line with customer specifications,” Cronje elaborates.

Additionally, a pollution control dam will be constructed for dirty-water containment, as well as clean water storage, sewage treatment facilities, power supply infrastructure, fuel storage, haul roads, workshops, ablutions and offices. It is planned that all of these will start being constructed from January 2023 onwards.

Mining will be undertaken by seven new 90 t excavators and 21 60 t articulated dump trucks. Four dozers, two graders and two water bowsers will also be added to the mine’s fleet.

The project team has the support of its parent, investment company Menar, which owns and operates underground mines – including the Zululand Anthracite Colliery, near Ulundi, in KwaZulu-Natal, and Kangra’s operation, near Piet Retief, in Mpumalanga.

All product will be trucked to the nearest railway siding at Rietkuil to be transported to the Richards Bay Coal Terminal for export.

Community Support

The Gugulethu project will create about 430 job opportunities for local community members as part of the opencast and underground phases of the project, of which about 200 job opportunities will emanate from the opencast component.

There will also be a social and labour plan, and local economic development projects in place for the mine, which are aligned with the Integrated Development Plan of the local municipality.

Cronje says Canyon Coal is committed to fulfilling its statutory obligations and ensuring that it contributes meaningfully to its host mining communities through investment and growing together.

Canyon Coal has an established social licensing department, which has reinforced the company’s ability to support enterprise development, local procurement and employment in the communities where it operates.